According to Empower, Americans believe money does buy happiness, especially when it comes to helping people afford to retire on their own terms. However, the majority of people predict they will have to delay retirement by an average of three years, while those with no financial plan have to delay by an average of five years.

Empower’s “Financial Happiness” study found that 59% of Americans, including 72% of Millennials and 67% of Generation Z, believe money can buy happiness, with the price tag a cool $1.2 million. On the flip side, a minority (17%) of individuals associate financial contentment with reaching a particular net worth.

Exploring the concept of a “Return on Happiness,” respondents attributed their happiness to various financial factors, including timely payment of bills (67%), freedom from debt (65%), the ability to afford daily luxuries without concern (54%) and the ownership of a home (45%). More than half of respondents (53%) find contentment in spending on experiences with loved ones, while 37% identified retirement on their own terms.

Some Americans, however, foresee having to delay retirement, estimating they will have to delay their expected retirement by three years to age 63, on average. One year ago, Gen Z planned to retire at age 49, but they have adjusted their expectation to age 54. Those without a financial plan foresee delaying retirement by five years.“

Though Gen Z dreams of retirement at age 54 and a third (33%) equate financial happiness with retiring on their own terms, less than half (47%) are putting money in a retirement plan (compared to 75% of Millennials),” Courtney Burrell, a financial professional with Empower, said via email. “For any generation and especially Gen Z, when it comes to securing financial freedom and sticking to a retirement goal, time is their biggest ally. Saving early opens the door to the magic of compounding and turning small contributions into significant savings over a longer time horizon.”

The Importance of a Plan

The study also found that future generations might not rely on an inheritance boost for their savings, with 67% prioritizing self-sufficiency rather than passing on wealth to future generations, a sentiment shared by 75% of Baby Boomers.

Financial stress stems from a range of additional economic pressures: Respondents cited inflation (81%), rising costs (81%), interest rates (66%) and student loans (32%) as dampening their sense of prosperity. Notably, 54% of respondents said they carried debt, and 36% noted they could not handle an unforeseen expense exceeding $500 without significant worry.

Empower indicated advice is a crucial element in determining financial happiness. Although more than half (52%) of respondents claim awareness of their financial goals, a significant proportion feels uncertain about how to reach them. The value of good money advice was underscored by 63% of respondents as a key factor in achieving financial happiness.

For many, well-being is deeply intertwined with the security provided by a financial plan, with 73% emphasizing its importance. Individuals with more detailed financial plans report about three times greater happiness in money matters.

“Each generation has faced its own challenges and headwinds when it comes to saving money and retirement and our research finds there are roadblocks to happiness for most (67%),” said Burrell. “However, it’s important to remember, the economy has its ups and downs. While you can’t predict or time the market, you can stay consistent with your financial approach and keeping an eye on long-term goals. Focus on having a solid budget, emergency fund and managing debts wisely. By staying consistent, adapting to economic shifts and maintaining a proactive mindset, you can navigate these headwinds and move steadily towards your financial goals and ultimately, greater happiness.”

The Empower “Financial Happiness” study was based on online survey responses from 2,034 Americans ages 18 and older, surveyed by the Harris Poll from August 7 to August 14, along with data from the Empower Personal Dashboard.